Transformation through regulation: How to turn compliance into business advantage

It’s a new reality for thousands of businesses across Europe, and thousands more beyond: a requirement to uphold ethical practices throughout their supply chains, in order to comply with the EU’s new Corporate Social Responsibility Directive (CSRD).

If you feel that your business isn’t ready: don’t fret, you are not alone. Sweep co-founder Raphael Güller recently spoke to The Economist Impact Sustainability Week attendees in London, about the challenges and opportunities of this new era of disclosures. 

Here are his key takeaways:

1. Excel is not the answer

To meet the demands of ever-evolving climate regulations, you need tooling that allows you to go granular, to make your reports auditable and flexible, and keep them secure. 

Additionally, your tools will have to be scalable. The companies Sweep works with typically have millions of data points: can your tool handle this amount? 

It’s also important to be able to work collaboratively across your own organization and your value chain - which will be made up of a multitude of actors, with differing levels of insight into the details of the regulations.

And don’t forget, this is a data, Finance, HR and IT project, as much as it is a sustainability project. Get in touch with all of these parts of your organization. And get ready.

2. AI is a powerful tool and catalyst, but not a cure-all

Many things have been said about the purported powers and potential of Artificial Intelligence, with opinions varying from AI saving the world, to ending the world.

In my view, AI will bring huge benefits, as long as we use it wisely. 

It can superpower data ingestion and analysis, vastly increasing the volumes of data that we can manage at scale, and hugely expanding our capacity to do this collaboratively. 

Ultimately, it will empower companies and the people who run them, to focus their bandwidth on taking action and managing change.

3. Yes, regulation = pain, but also opportunity 

Don’t be down on disclosures. Regulations bring opportunities to unlock extra-financial reporting as a day-to-day business practice which ultimately enables you to better steer your business and innovate. 

This won't go away and the companies that realize this now will become the leaders in a sustainable feature.